Wednesday, March 19, 2014

Now that Stephen Harper's
long-serving Finance Minister, Jim Flaherty, has resigned, it's time to take a
look at how Canada's economy is really doing, particularly on the employment front
since this is where the Harper government really likes to promote its
accomplishments through those nauseating Economic Action Plan promos that have cost Canadian taxpayers tens of millions of dollars.

While the job situation in Canada
has improved, the jobless rate is still elevated compared to pre-Great
Recession levels.

A policy brief by the Canadian Chamber of
Commerce looked at the performance of Canada's labour market in 2013 and found
the following:

1.) In 2013, net new job positions
totalled only 99,000, down from 307,900 in 2012. This works out to 8,250 net
new jobs per month in 2013 compared to 25,658 per month in 2012, a decline of
17,408 jobs per month or 67.8 percent.

2.) The private sector created
120,500 net new jobs in 2013 and public sector payrolls dropped by 25,600.

3.) Of the net new jobs created in
2013, 95 percent were part-time jobs in contrast to 2012 where all of the net
new jobs created were full-time jobs. This is of great concern because it means that many Canadian workers are underemployed.

4.) Nearly 70 percent of the net new
jobs were created in one province and more than 86,500 or 87.4 percent of the
net new jobs created were in one industry, the services-producing sector which
includes professional, scientific and technical services. This sector
includes legal services, surveying and mapping, design, scientific research and
development and advertising among others.

5.) Job areas with significant net
losses included educational services which saw a net decline of 39,600 jobs and
public administration which saw a net decline of 29,600 jobs.

6.) The average duration of
unemployment remained at elevated levels in 2013 compared to pre-Great
Recession levels. In 2013, the average length of unemployment was 20.7
consecutive weeks compared to only 15 weeks prior to the 2008 recession and down
only slightly from the post-recession peak of just under 23 weeks in 2011.

Here is a chart showing the
year-over-year changes in employment by industry for 2013:

Here's how the provinces performed:

Of the 99,000 net new jobs, 67,900
or 68.6 percent of the total were created in Alberta. Canada's
unemployment situation would look far worse if Saskatchewan and Alberta
statistics were not included. With Alberta and Saskatchewan excluded,
Canada would have only created 18,600 net new jobs, hardly a shining example of
federal fiscal success. Canada's unemployment rate would also jump
substantially to somewhere in the mid-eight percent range rather than the
headline 7.2 percent rate.

Lastly, some provinces are still
experiencing very high levels of labour market slackness which is defined as
the number of unemployed people for every job vacancy. Here is a graph
showing how difficult the situation still is for unemployed workers in
Eastern Canada:

In Alberta and Saskatchewan, there
were only 2.2 and 2.4 unemployed workers respectively for every job opening
compared to 14.3 in Newfoundland and Labrador, 9.4 in Nova Scotia, 11.1 in New
Brunswick and a whopping 15.0 in Prince Edward Island. This explains the
great exodus to the west from Maritime Canada.

According to the Bank of Canada,
a recent survey of businesses found that 53 percent of businesses expected to add
employees during 2014 with 36 percent planning to keep the employment level
status quo and 11 percent decreasing their level of unemployment. With
Canada's number of potential workers growing through both immigration and
maturing of the post-baby boomer generation, it will be interesting to see
whether the economy can create enough new jobs to push Canada's unemployment
rate down to its pre-Great Recession level of 6 percent anytime soon. In
any case, we can clearly see that the Harper government's bragging about their
economic prowess may be a bit overstated, particularly given the weakness in Canada's labour market in 2013.

1 comment:

Please reverse the order of the Unemployment to Job Vacancy. The provinces should follow a map - it's hard to understand when the eastern provinces are on the left side and the western ones are on the right.

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About Me

I have been an avid follower of the world's political and economic scene since the great gold rush of 1979 - 1980 when it seemed that the world's economic system was on the verge of collapse. I am most concerned about the mounting level of government debt and the lack of political will to solve the problem. Actions need to be taken sooner rather than later when demographic issues will make solutions far more difficult. As a geoscientist, I am also concerned about the world's energy future; as we reach peak cheap oil, we need to find viable long-term solutions to what will ultimately become a supply-demand imbalance.